Chapter 39: Real Estate Speculation and Planning
As property prices in Capital City soared daily, she felt that any further delay would be a costly loss.
The thing about real estate speculation was, it mainly depended on the location.
As long as the location was good, even if property prices fluctuated in the future, a good location would still have a certain ability to resist risks.
Conversely, smaller places wouldn’t do.
Therefore, she set her sights on the most bustling area within the second ring of Capital City.
There, large enterprises were clustered, enough to guarantee further increases in property values in the future.
It is worth mentioning that the average price within the second ring had already reached about forty thousand.
She contacted Liu Fen to go look together; someone like Liu Fen, a local Capital City mom, was very familiar with the Capital City market.
She knew clearly which new developments were launching and which areas had increased in prices.
When her mother found out that her daughter was going to buy a house within the second ring again, she dropped her work without a second word and waited at the community gate for her elder daughter.
Song Yanxi drove over in her convertible Bentley in a rush, and the moment she got into the car, Liu Fen felt a sense of pride.
This feeling was clearly brought by the Bentley.
The most valuable properties within the second ring were the Siheyuan, which were now very hard to come by.
Liu Fen made calls everywhere and soon found a set.
The owner specifically demanded full payment.
The location was in the Dongcheng District of the second ring, which is the economic, commercial, and financial center of Capital City with better economic development.
Shopping and daily life were also very convenient.
Critically, as the old imperial city within the second ring, Dongcheng District had a profound history and rich cultural features.
This kind of location was definitely resistant to changes in property prices.
The apartment was finely decorated, around one hundred ninety square meters, a layout of four bedrooms and two living rooms plus two large balconies.
Upon seeing it, Song Yanxi expressed her satisfaction; this community had been developed only five to six years ago, and its potential for appreciation was still very high.
In a few years, it could absolutely increase to seventy or eighty thousand.
Yet she had underestimated Capital City’s soaring real estate market.
In less than three years, the average price here had already exceeded one hundred thousand.
In another three years, it shot up to one hundred and fifty thousand.
As for now, with an average price of forty thousand, the total cost for full payment was 7.6 million.
Song Yanxi felt that owning an apartment within the second ring was very necessary.
In the future, when she came here for fun, she wouldn’t need to stay in a hotel.
Eventually, if they managed to extend their fruit shop into the second ring, this place would become their second home.
Without much hesitation, bargaining was not an option.
After all, the property prices were still rapidly increasing.
She planned to give the place a little arrangement; it would become their home within the second ring.
As for selling it, that would depend on the future real estate market conditions.
She definitely wasn’t considering it for the next three to five years.
“Yanxi, since the house will be empty, have you considered renting it out?”
“There’s no need.”
Song Yanxi would rather stay there herself for three days a year than consider renting it out to others.
She still cherished the house she had bought.
Besides, there were quite a few schools around.
If Little An’an ever studied in this area, it would be just the place to stay.
After purchasing this apartment, her personal savings were almost depleted.
Though the Tengsheng Fruit’s company account did have tens of millions.
That was the money of wholesalers and clients, absolutely untouchable.
Cleaning up the place was quick, simply changing the bed sheets and duvet covers of a few rooms.
No other major adjustments were needed.
After all, they weren’t going to live there long-term.
Having bought the house, she still followed the tradition of posting on social media.
She didn’t exaggerate, just titled it, “Capital City’s Second Home.”
That afternoon, she went to handle the transfer procedures.
As to how to bypass the purchase restrictions, it’s best left unsaid, but those who know understand.
There were plenty of ways.
After emptying her personal savings, Song Yanxi went back to her job earnestly.
She couldn’t flaunt her wealth anymore.
She felt that if she could flip another property in Capital City by the end of the year, then this year would truly be considered extremely successful.
Unlike her, Chen Pingsheng drove his Navigator around looking for community stores.
So-called community stores are mainly located right at the residential area entrances.
Such stores shouldn’t be too large as their main consumer group is the residents of that community.
A good reputation could radiate to two or three neighboring communities.
That was essentially the limit.
The competition among community stores was fierce, with those small yet upscale fruit stores dominating.
For them to enter the market was undoubtedly a bit of bullying.
But in business, that’s just the way it is; big fish eat little fish, and little fish eat shrimp.
The goal for August was to invest in ten community stores.
By the 15th, due to the lack of a recharge promotion in July,
the entire Tengsheng Fruit’s profit for July was only 360,000.
What Song Yanxi managed to get in her hands was only 190,000.
It’s worth mentioning that the locations for all ten community stores had been found, and with money thrown into them, they were expected to open in early September.
The five main street stores were still engaged in a price war with Nongguo Garden.
Merely breaking even was already the limit.
Aside from their battle with Nongguo Garden, the small nearby fruit stores had already died off completely.
While the situation remained at a stalemate, Chen Pingsheng did not intervene.
In late August, Chen Pingsheng shifted his core focus to restructuring the headquarters.
Currently, Tengsheng Fruit mainly divided its stores into two types.
One type was the fruit supermarkets on commercial streets.
These usually required an investment of at least 1.5 million to 2 million.
The other type was the community stores.
These typically involved an investment ranging from 300,000 to 600,000.
The two types of stores had different formats and management standards.
For instance, fruit supermarkets, due to their large size, often needed to include some specialty products besides fruit.
Such as snacks, local specialties, etc.
Community stores were different; small and focused solely on selling fruit.
Chen Pingsheng felt that fruit supermarkets had the potential to evolve into general supermarkets.
What he was mainly doing now was fine-tuning management.
Which meant breaking down the processes and management of the stores into finer details, creating standards, and then promoting these standards downward.
There was also a need to increase promotional efforts for deliveries.
They were able to keep the fruit spoilage rate at the industry’s lowest standard primarily because the stores’ affordability attracted a high volume of customers.
Which then resulted in a high turnover rate.
The second reason was due to deliveries.
Deliveries had reduced their fruit spoilage to the lowest level.
After standardizing these specific business practices, Chen Pingsheng began planning the finances of Tengsheng Fruit.
Overall, the current system of shareholding was still somewhat messy.
It was manageable when the business was small.
But it became less suitable as the business grew.
The main issue was that Tengsheng’s shares were still allocated in the form of store shares.
This was very unfavorable for managing the headquarters.
Chen Pingsheng had the finance department conduct a comprehensive audit, aimed at consolidating the store shares into the headquarters and then redistributing them.
After this accounting,
the finance department’s proposal left Chen Pingsheng’s personal share unchanged at 51%.
Zhang Tao, Liu Jing, and Chen Hao each had 8%.
Totaling 40%.
Old Guo got the remaining 9%.
Everyone transferred their store shares to the headquarters.
He also set two rules for Tengsheng.
Money would be distributed on the 15th of every month, without fail.
The second rule was to never use the company’s funds to open new stores.
This point was actually very crucial; Tengsheng’s corporate financial accounts always had tens of millions lying dormant, most of which were unsettled payments.
If he were to use this money to open new stores, he could fill Shijingshan in less than a month.
The temptation was undoubtedly great.
But the risk was also high. A business crisis could easily lead to a break in the capital chain if the corporate funds were misappropriated.
Many business owners have played themselves into bankruptcy this way, too numerous to count.
Therefore, he had to resist this temptation.
Opening stores could only be funded by these shareholders themselves.
If they had money, they would open one; if not, they would stop.
They definitely wouldn’t engage in so-called capital games.
In August, after re-planning Tengsheng headquarters, Chen Pingsheng officially established Tengsheng Group Ltd.